Anti-corruption minister Tulip Siddiq resigned amid questions over his relationship with the country's ousted leader, her aunt Sheikh Hasina.

Britain's minister for financial services and anti-corruption has resigned after weeks of questioning over his financial ties to his aunt, ousted Bangladesh Prime Minister Sheikh Hasina.

Tulip Siddiq, 42, has repeatedly denied any wrongdoing and Prime Minister Keir Starmer said last week he had full confidence in her.

On Tuesday, a second government minister resigned in two months, a blow to Starmer, whose approval ratings have plummeted since his Labor Party won the general election in July.

In a letter to the prime minister, Siddiq reiterated that she had done nothing wrong but said continuing to work at the Treasury could "distract attention from the work of government."

Starmer said he accepted her resignation with "sadness".

He thanked Siddique for his work and admitted "no evidence of financial impropriety on your part was found."

Starmer added: "You have taken a difficult decision to end our ongoing disruption of the agenda for changing Britain and want to make it clear that the door forward remains open for you."

Following the election, Siddique was appointed to oversee financial services policy, which included responsibility for anti-money laundering measures.

Starmer quickly appointed pensions minister Emma Reynolds to replace Siddique.

Hasina, who has ruled Bangladesh since 2009, is under investigation for alleged corruption and money laundering. Hasina and her party deny wrongdoing.

Siddique was named in December as part of a Bangladesh probe into whether his family was involved in misappropriating funds from infrastructure projects in Bangladesh.

The anti-corruption commission has alleged billions of dollars worth of financial irregularities in the awarding of nuclear power contracts worth $12.65 billion, saying Hasina and Siddiq may have benefited from them.

Siddique faces further scrutiny over his use of British property linked to Hasina and her supporters.

Citing documents filed with Companies House and the Land Registry, Reuters showed that Siddiq lived in a property in north London that was owned by Bangladeshi lawyer Moin Ghani, a representative of Hasina's government, in 2009. Gifted to family in the year.

She also bought a separate property in London in 2004 without paying any fees to a developer linked to Hasina's party Awami League, the Financial Times reported this month.

Hasina fled to India from Bangladesh after she was ousted during weeks of protests.

Siddique's departure follows the resignation of UK Transport Secretary Louise Hague late last year.

Before entering government, Hager pleaded guilty to a minor criminal offense involving a cellphone she mistakenly reported stolen.